A $2 billion project to cover 10 square miles of federally owned desert land east of San Diego with solar dishes is struggling with financing and might not get built if a judge sides with an Indian tribe, its backers said Monday.

“At this point, we don’t know when we can start construction,” Ella Foley Gannon, a lawyer for Imperial Valley Solar LLC, told a San Diego federal judge.

San Diego Gas & Electric is counting on power from the 709-megawatt Imperial Valley Solar project to help it meet state requirements for green energy.

An Indian tribe, the Quechan near Yuma, is asking Judge Larry A. Burns for an order that would prevent construction of the project. It says federal approvals were improperly given and the land is inappropriate for such an intensive use.

Burns heard arguments Monday afternoon, and said he’d make a decision on Wednesday.

The Irish-backed companies behind the project have spent $20 million so far, Gannon told the judge.

They were hoping to get construction started before Dec. 31 to qualify for up to $600 million in federal grants, but that’s highly unlikely, she said.

They’re now hoping that the federal deadline for green energy stimulus funding is extended.

Unlike photovoltaic panels, which convert the sun’s light into heat, the project is designed around mirrored dishes concentrating the sun’s heat onto Stirling engines, a technology never before rolled out at this scale.

Officials have been meeting with investors, but so far, nobody had agreed to put in the money that it would take to get the project built, she said.

“This lawsuit has certainly chilled the discussions,” Gannon said.

The land on which the project is planned was set aside for conservation 30 years ago, Thane Somerville, a lawyer for the Quechan said during Monday’s hearing.

Even though solar projects are allowed, development shouldn’t proceed in a way that harms natural and cultural resources, he told the judge.

“This project is simply not appropriate for the land,” he said.

The companies developing the solar farm and building the dishes to be placed there are owned by NTR, a money-losing Irish conglomerate.

Houston-based Tessera Solar is the developer, while Stirling Energy Systems, of Scottsdale, Ariz., will provide the dishes.

NTR told investors last week it had to write off 96 million euros, or about $127 million, related to the solar investments in the United States, according to a report in the Irish Times.

The company lost 210 million euros, or about $280 million, in the fiscal year ended March 31.

NTR also said that it plans a “liquidity event” in the next two to three years. That’s a financial term that could refer to an initial public offering, selling to a larger company or liquidating assets.

The company, with its roots as a toll-road operator, invested heavily in Stirling engines and other green technology in the United States. That was before Ireland’s financial meltdown.

Its Stirling engines are also at the heart of a separate project in Riverside county called Calico Solar.

A report on industry website greentechmedia.com last week cited unnamed sources saying that Tessera and Stirling had laid off a large percentage of workers and had undergone management changes.

“We don’t discuss individual staff-related actions,” spokeswoman Janette Coates said. “I can confirm however, that as we transition out of the active development stage now that the California projects have been approved, we’ve recently restructured the businesses to manage expenditures.”

She said the company is looking for someone to buy into the projects before construction starts.

Tom Budlong, a Sierra Club member who testified against the Imperial Valley project during a hearing this summer said money will be hard to find because the Stirling technology has been difficult to perfect despite 100 years of history.

“Large investors, who tend to look carefully at where they place their bets, get skeptical when they look deeply at the dish-Stirling prospects,” he said. “Even though the Imperial and Calico projects would be almost entirely government funded or loan-guaranteed, the fundamentals still bubble up to the surface.”

SDG&E has long cited the project as one that will supply renewable power across the Sunrise Powerlink, for which it broke ground last week.

SDG&E spokesman Art Larson said the utility is still planning to get power from Imperial Valley Solar.

“We’re just hoping this is a minor setback,” Larson said. “We’ve always considered to project to be promising and beneficial to the region.”

SDG&E proposed investing up to $600 million in a Montana wind farm this summer as a way of making sure it got built and the utility could buy its power.

The company said that investment is necessary because banks aren’t putting money into green investments.

But Larson wouldn’t say whether SDG&E would do the same with Imperial Valley Solar.

“It’s too early to speculate,” he said.

Some critics of Sunrise have also knocked the Imperial Valley Solar project, saying SDG&E wasn’t serious about buying power from it.

“What will the Sunrise Powerlink connect to if the dish solar project in Imperial County is a mirage?” asked engineer Bill Powers, frequent SDG&E critic.

He then pointed to gas-fired power plants owned by SDG&E's sister company, Sempra Generation, in Arizona and Mexico.

SDG&E's Larson said the utility is spending money on other wind and solar projects in the region.